Your Texas example is indeed a horror story, but it is also a good example on why diversification is so important.

In general diversification is the recipe of success, but every once in a while market factors come together that make a certain market shift clear and present and step 1 is getting funds into a safe haven, step 2 is making some $ on the shift if possible. 

That way you have asset diversification. 

Look for markets where jobs are growing, incomes are growing, good job diversification, housing is affordable, rents are stable and/or climbing, vacancy is low, and unemployment is low... that will tilt the cards in your favor. 

But at the same time I'm a fan of diversification too and cost savings being that I'm already closing on a loan here and thus may as well use it to save 4% on a rental (fees) and be a cash buyer (as far as a seller is concerned), both of which improve my equity ratio out of the gate.

Diversification should leverage the downside of the next dip!

In order to organize your search, create a spreadsheet and gather the following data points for the past 5 years for at least 7 midwest markets:- unemployment- job growth- job diversification- income growth- population growth- home pricing- rent affordability- vacancy ratesAlso note, landlord / tenant laws and property tax ratesOnce you have this, order your search based on trends (there isn't a perfect market either). 

Hello everyone,I am currently working on flips, an agent, a landlord, and just started a role as developer in the real estate world. I seem to be slightly overwhelmed at times and know that real estate investing is in...

I have money in retirement accounts that are invested in stock and bond index accounts because I believe in diversification of assets by class.

I realize a bigger pockets about real estate and not the stock market but I like the diversification and wouldn’t consider cashing in or altering my portfolio.